As a brand new trading week gets underway, WTI crude oil is trading somewhat cautiously with prices dipping over worries about a resurgence in fresh coronavirus cases across India and Japan, and its possible impact on oil demand. At the time of writing, WTI crude oil is trading at around $6 per barrel.

The risk-off mood in global financial markets over rising concerns about the latest wave of the pandemic across leading economies drove crude oil prices lower through the past week, and extends the bearish trend into the beginning of this week as well. India is the worlds’ third largest oil importer, followed by Japan, and both economies are reeling under fresh outbreaks that have forced authorities to impose restrictions hampering economic activity, thus weakening the demand for oil.

India has been reporting record high tolls for fresh infections over the past several days, and while its government has ruled out a total lockdown, states have imposed curfews and restrictions to contain the rapid spread of infections. Meanwhile, Japan has imposed a state of emergency through Tokyo, Osaka and other regions for the third time in a bid to bring the pandemic under control just before the Tokyo Olympics are scheduled to begin.

Later this week, crude oil could experience some volatility ahead of the upcoming OPEC+ technical meeting. While markets are not expecting the group to announce any drastic changes to its policy, any modifications in production curbs previously announced will be closely monitored by oil traders.